BILL NUMBER: AB 1289	CHAPTERED  07/13/99

	CHAPTER   117
	FILED WITH SECRETARY OF STATE   JULY 13, 1999
	APPROVED BY GOVERNOR   JULY 13, 1999
	PASSED THE SENATE   JULY 1, 1999
	PASSED THE ASSEMBLY   JUNE 16, 1999
	AMENDED IN ASSEMBLY   JUNE 16, 1999
	AMENDED IN ASSEMBLY   MAY 28, 1999
	AMENDED IN ASSEMBLY   APRIL 27, 1999
	AMENDED IN ASSEMBLY   APRIL 12, 1999

INTRODUCED BY   Assembly Members Baugh, Romero, Runner, and Davis
   (Coauthors:  Assembly Members Wayne, Maldonado, Strickland,
Maddox, Robert Pacheco, Pescetti, Florez, Reyes, Nakano, Jackson,
Havice, Soto, Correa, and Lowenthal)

                        FEBRUARY 26, 1999

   An act to amend Section 17273 of the Revenue and Taxation Code,
relating to taxation, to take effect immediately, tax levy.


	LEGISLATIVE COUNSEL'S DIGEST


   AB 1289, Baugh.   Personal income taxes:  health insurance
deduction.
   The Personal Income Tax Law, by reference to specified federal
statutes, for taxable years beginning on or after January 1, 1999,
allows a deduction for 40% of the amount paid or incurred during the
taxable year by a self-employed individual for insurance that
constitutes medical care for the taxpayer and his or her spouse and
dependents.  Existing federal law incrementally increases that
deduction to certain percentage rates.  Under federal law, a 60%
deduction is allowed for taxable years beginning in calendar year
1999 through 2001, a 70% deduction is allowed for taxable years
beginning in calendar year 2002, and a 100% deduction is allowed for
taxable years beginning in calendar year 2003 or thereafter.
   This bill would conform the deduction allowed under the Personal
Income Tax Law to the applicable federal percentage of the amount
paid or incurred for taxable years beginning on or after January 1,
1999.
   This bill would take effect immediately as a tax levy.


THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:


  SECTION 1.  Section 17273 of the Revenue and Taxation Code is
amended to read:
   17273.  For each taxable year beginning on or after January 1,
1999, Section 162(l)(1) of the Internal Revenue Code, relating to
applicable percentage, is modified to provide that Section 2002 of
the Tax and Trade Relief Extension Act of 1998 (P.L. 105-277),
relating to phasein of a 100-percent deduction for health insurance,
shall apply.
  SEC. 2.  This act provides for a tax levy within the meaning of
Article IV of the Constitution and shall go into immediate effect.
